Biden to nominate Raskin, 2 others to Fed board

“President Biden has nominated a serious, qualified, nonpartisan group of five candidates for the Federal Reserve Board who, together, will bring an extraordinary amount of skill, experience, and competence to the Federal Reserve,” the person said. Biden previously renominated Federal Reserve Chair Jerome Powell for a new term and selected Federal Reserve Governor Lyle Brainard to serve as vice chair.

By naming Raskin, a former Federal Reserve governor and onetime deputy secretary of the Treasury, Biden is putting tightly-regulated pressure for tighter oversight of Wall Street. That may appease financial regulators who have criticized Powell for loosening rules on major financial firms and for not doing more to combat climate change.

Biden announced in November that he would end up with Powell — a Republican named by former President Donald Trump as Federal Reserve Chairman — for another term as president, opting for continuity at the central bank as the specter of rising inflation looms in an election year.

However, Biden’s latest picks will put a strong democratizing stamp on the central bank, reinforcing the Fed’s focus on the welfare of American workers as well as on potentially explosive new issues like climate change and racial equality. You may also be a counterweight to the increased pressure to act more aggressively to fight higher prices, which is another potential source of stress on the board.

With inflation soaring to its highest rate in four decades, the Federal Reserve is beginning to step back from its extraordinary support for financial markets and is expected to start raising interest rates over the coming months. It would be a delicate balancing act for Federal Reserve officials, who aim to cool the economy without causing a recession. They are facing political pressure from both sides of the aisle to rein in prices, while ensuring that the labor market continues to improve.

Once Biden formally unveils the candidates for the three remaining vacant seats, the Fed will have five appointments pending, including Powell and Brainard, who appeared before the Senate for nomination hearings this week.

Cook, a Michigan State University professor, has received enthusiastic support from climate advocacy groups. Progressive activists have also praised her work on the economic effects of racial discrimination and her role as a mentor to many young people of color in the economy. She served as a senior economist on the White House Council of Economic Advisers during the Obama administration.

Jefferson, a former Fed economist, is a professor and administrator at Davidson College, North Carolina. His work focused on “the role of education as a barrier against unemployment, the effect of business cycles on poverty rates, and the distribution of income between labor and capital,” according to his autobiography.

The candidates are likely to arouse skepticism from many Republicans, who have criticized what they see as the Fed’s overreaching.

“Members of the Federal Reserve Board of Governors must have exceptional qualifications and a rigorous view of the Fed’s narrow mandates with regard to monetary policy and banking supervision,” said Senator Pat Tomey (R-Pen), the top Republican member of the Senate Banking Committee. In a statement Thursday evening. “I will examine closely whether Ms. Cook and Mr. Jefferson have the necessary experience, judgment, and political views to serve as Fed Governors.”

Tommy, who has already raised concerns about Raskin’s nomination, said he worried she would “abuse the Fed’s narrow legal mandates on monetary policy and banking supervision to get the central bank to actively engage in capital allocation.”

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